The Lessons of DeBary: Has Florida finally become a Kleptocracy?

Sit down and buckle-up, kids.  This one’s gonna bounce around a bit. . .

It’s been just over six years since a statewide grand jury investigating public corruption alerted Florida residents to the hundreds of millions of dollars in “corruption tax” we pay annually in the form of fraud, graft, bid-rigging, quid pro quo deals and outright theft by government officials and contractors.

Needless to say, ethics and anti-corruption reform is long overdue in the Sunshine State, but for some reason we treat it like a prostate exam – we know it’s necessary, even beneficial in the long-run, but not right now, Doc. . .

Stories of public officials using their position of trust for private gain are legendary here, and we have all experienced the frustration of watching these cases go unprosecuted due, in part, to the double-standard which previously existed in Florida’s public integrity statutes.

You know the old adage, “If I did that, they’d put me under the jail”?  Well, it’s true.  They would.  But only because the rules for public officials have always been very different than those for everyone else.

Earlier this year – after a very tumultuous path – Governor Rick Scott signed a bill ordering changes to statutory definitions which lowered unusually high burdens of proof for Florida prosecutors in public corruption cases.

For instance, prior to the change, the state was required to enter the defendant’s mind and prove beyond any reasonable doubt that the individual acted with “corrupt intent.”

Now, the law more closely aligns with other criminal statutes by requiring prosecutors prove that the accused “knowingly and willingly” engaged in the criminal act charged.

The bill also expanded the scope of who may be prosecuted under Florida’s public integrity statutes to include contractors and consultants doing business with public entities.

Now, a full six years after the statewide grand jury sounded the klaxon – and three years after a study published by Integrity Florida, a government ethics watchdog group, determined that for the decade 2000 to 2010, the State of Florida ranked first in the United States in federal corruption convictions – we get a few watery amendments to corruption statutes.

That’s like throwing a deck chair off the Queen Mary and everyone knows it.

Hell, if the situation in the City of DeBary has proven anything it’s that quid pro quo corruption by certain gubernatorial appointees and others with a sworn duty to act in the public interest has become so brazen and bald-assed that the practice is now the accepted norm.

The bastards don’t even try to hide it anymore.

In my view, an opportunity for the proliferation of public corruption opened in the aftermath of 9-11 with the reorganization of federal law enforcement agencies.

At that time, the focus – especially for the Federal Bureau of Investigation – turned from white collar crime, bank robbery, violent drug crimes and public corruption investigations almost exclusively to counter-terrorism activities.

In 2002, former FBI Director Robert Mueller restructured agency assets and changed priorities from solving crimes to preventing domestic terrorist attacks.  This saw the advent of very effective tools such as Joint Terrorism Task Forces and intelligence fusion centers – essentially local, state and federal law enforcement agencies working cooperatively to exchange information and actionable intelligence on potential domestic and international terror threats.

There is no doubt that this change of emphasis was – and continues to be – both necessary and very effective in protecting our homeland from the clear and present danger of the active global jihad being waged by radical Islam.

However, like an egg-sucking dog, once some politicians get the taste for easy money it’s a hard habit to break.

Those with a criminal bent will always find a way to exploit weaknesses in the system, and corrupt politicians and public officials learned quickly – like titmice in a corn crib – that they were free to dance whenever the barn cat gets distracted by the bigger rats.

When they realized the shift in law enforcement’s focus, it’s apparent many Florida politicians didn’t just dance – they held a Mardi Gras Ball.

Still, in the 10-year period reviewed by Integrity Florida, 781 elected and appointed government officials were convicted of corruption crimes.

In my experience, rarely is a criminal apprehended on his first offense – and on a good day about one in four crimes are ever solved.  Imagine the number of violations that went undetected?

In a 2013 New York Times article, reporter Nick Madigan wrote:

Florida, and especially Miami and its environs, has long had a reputation as a place where the odd and the eccentric mix with the furtive and the felonious. Last century, organized crime figures from Chicago and New York set up lucrative gambling, extortion and loan-sharking endeavors in Miami Beach and elsewhere, and beginning in the 1980s, South Florida’s economy, culture and reputation were transformed by drug trafficking.”

“With so much money sloshing about, it was perhaps inevitable that a parade of officials would enrich themselves illicitly at the public trough.”

Has Florida finally become a Kleptocracy?

In a recent bombshell media investigation involving the leak of 11.5 million documents, euphemistically known as the “Panama Papers,” we got a glimpse at how the uber-rich use offshore banking, tax havens and hard-to-track corporation to their advantage.

When the report hit, the world learned of a secretive shadow economy involving high-ranking foreign government officials – including 12 current or former world leaders –  Russian oligarchs, international criminals, celebrities, sports figures and more than a few United States citizens who systematically exploit the secrecy and tax advantages of offshore banking and foreign corporate regulations to hide often ill-gotten personal wealth.

(As I write this it sounds like some weird Tom Clancy novel, right?)

Naturally, Florida plays a prominent role in all this – primarily in the form of “cash” purchases of real estate here in the Sunshine State.

The scheme is perpetrated when a foreign “investor” wants to purchase Florida real estate with cash.  The “investor” goes to a Florida law firm who in turn works through a Panama-based firm to establish an offshore company in the British Virgin Islands, where the owners of the new corporation are not required to reveal their identity.

In turn, the domestic law firm sets up a Florida-based company – which is wholly owned by the offshore entity – and the real estate then is purchased for cash through the domestic corporation.

The “investor” has effectively parked his cash in Florida real estate through an offshore company, owned by a Florida company.

According to the Miami Association of Realtors, these cash deals accounted for 53% of all Miami-Dade home sales in 2015 – and 90% of new construction sales.  It has been suggested that this huge influx of foreign money is a big reason the Florida real estate market has seen such a strong and sustained resurgence since the Great Recession.

And new construction seems to be very popular right now. . .

Given the fact that buyers can conceal themselves with shell corporations – and the cash transaction circumvents banking regulations designed to detect money laundering activities – if this isn’t criminal, it ought to be.

While there may be reasons for non-transparency in these transaction, for the life of me I can’t think of one. . .

You know, I’m not out to save the world – and my days of jousting with windmills are over.  But is it too much to ask that a public official – as a recipient of public funds – provide honorable, fair and effective service to their constituents?

I know in my heart from personal experience that the vast majority of elected and appointed public officials are honest, hard-working people who have a real desire to serve and make a positive difference, and the last thing I want to do is paint all government officials with the same brush – that would be unfair and wrong.

In fact, some of the finest people I have ever known were small town politicians and appointed officials with huge hearts and enormous civic pride who receive far less credit for effecting positive change than they should.

It’s a hard dollar even on a good day, and I have a tremendous amount of personal admiration for politicians who work hard to do the right thing.

Perhaps I have too much time to think, but when you consider the amount of funny money at play in Florida politics – much of it injected into the economy by speculative real estate development – you get the idea that maybe these things deserve a bit more scrutiny by state and federal regulators.

Especially when developers – in concert with local government – start moving on sensitive wetlands and conservation areas.

Governor Scott would pooh-pooh that radical thinking as an impediment to “economic development” and a bunch of dirt-worshiping tree-huggers standing in the way of progress.  (“I’m creating JOBS here!  And I don’t give two hoots if it paves over every gopher tortoise and “osprey” nest in the state!  Turtles don’t vote, dammit!)

Slick Rick never saw a development project he didn’t like – especially if his friends stand to make a butt-load of money off it.

Development isn’t just pouring concrete and hammering nails. There are a lot of other opportunities to make money on the periphery.  Like sutler’s following the troops, there are engineering consultants, environmental consultants, financial consultants, etc., etc.  – folks who help lay the ground work, obtain the permitting, provide site management, work the financing, amend the zoning, prepare the legal documents, distract advocacy groups, and generally ensure that the project meets the “regulatory requirements” needed to move the development forward.

You can’t swing a dead cat in this state without hitting a “consultancy” or “contractor” supporting real estate and property development interests.

Don’t get me wrong – I’m not anti-business, I’m anti-crime.  Just give me a level playing field for everyone and I’ll shut the hell up and get hypnotized by daytime TV.

But, lets face it, some of this is getting too flagrant to ignore.  DeBary proved that.

Only in Florida would a sitting governor appoint an active consultant to chair the governing board of a regulatory agency that he actively represent clients in front of.

Read that sentence again.  (And, no, you’re not living in a parallel universe – this is Florida.  The rules are different here.)

It’s time we, the long-suffering people of Florida, begin the process of taking our municipal, county and state governments back from those who can’t grasp the concept that public service is a privilege – not a personal piggy bank.







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